Did Apple CEO Steve Jobs ask Palm’s Colligan to collude?

“Former Palm Inc. Chief Executive Officer Ed Colligan rejected a proposal from Apple Inc.’s Steve Jobs to refrain from hiring each other’s employees two years ago, calling it wrong and ‘likely illegal,’ according to their communications,” Connie “The Vulture” Guglielmo reports for Bloomberg.

MacDailyNews Note: You remember Ed:

We’ve learned and struggled for a few years here figuring out how to make a decent phone. PC guys are not going to just figure this out. They’re not going to just walk in.Palm CEO Ed Colligan, commenting on then-rumored Apple iPhone, Nov. 16, 2006

Guglielmo continues, “Colligan, who stepped down as CEO in June, discussed the matter with Jobs in August 2007, as the mobile-phone war heated up, according to the communications. Apple had introduced the iPhone two months earlier, just as Palm hired a former Apple executive, Jon Rubinstein, to develop new smart phones. Jobs, Apple’s CEO, told Colligan he was concerned that Rubinstein was recruiting Apple employees. ‘We must do whatever we can to stop this,’ Jobs said in the communications.”

“The U.S. Justice Department is investigating possible collusion in hiring among technology companies, a person familiar with the probe said in June,” Guglielmo reports. “Derick Mains, a spokesman for Palm, said the company hasn’t been contacted by the Justice Department. Bloomberg News reviewed the communications between Jobs and Colligan.”

“The exact details of what Jobs proposed to Colligan aren’t known; Jobs didn’t mention a proposal in the communications reviewed by Bloomberg. Jobs said Apple had patents and more money than Palm if the companies ended up in a legal fight, according to the communications,” Guglielmo reports.

“Rubinstein was head of Apple’s iPod unit before he left the company in 2006 and had worked with Jobs for more than 15 years,” Guglielmo reports. “Palm hired him as executive chairman in 2007 and he succeeded Colligan, 48, as CEO this year.”

“‘Your proposal that we agree that neither company will hire the other’s employees, regardless of the individual’s desires, is not only wrong, it is likely illegal,’ Colligan said to Jobs, 54, according to the communications,” Guglielmo reports. “Colligan said he thought about Jobs’s proposal and considered offering hiring concessions, before deciding against it, according to the exchanges.”

Guglielmo reports, “Employees are entitled to seek work wherever they want, including at rival firms, said Donald Russell, an antitrust lawyer who worked at the Justice Department for more than two decades before going into private practice in Washington.”

Much more in the full article here.

MacDailyNews Take: We’ve heard talk that Rubinstein’s departure from Apple wasn’t all sunshine and roses. In fact, sunshine and roses were not present at all. Despite the public pronouncements, according to rumors we’ve heard, Rubinstein’s departure from Apple was, uh, let’s say, not-so-amicable. Worse than Fred Anderson’s exit even.

Let’s cut right to the chase: Why is Bloomberg News privy to Palm’s communications and who gave them to Bloomberg News and for what purpose?

Is this the best Palm can do? Is this all they have left? If so, we might be hearing Palm’s death rattle on this lovely Thursday morning.

In our opinion, Palm is headed by vindictive, derivative, scorned little men. Outfits headed by such people usually do not fare very well. Neither do people who get into pissing matches with Steve Jobs.

25 Comments

  1. I’ll wait until I see the actual content of verified instances of communication between Apple and Palm. Until then, it is all just official sounding rumor without substance. I believe the SJ is smart enough not to suggest anything illegal in tangible form.

  2. It’s not just tech companies. If there is talent and intellectual property involved, companies will regularly take steps to prevent key employees from jumping ships to competitors. Employees will often have to sign strict non-disclosure agreements that include provisions that prevent them from going to competitors. Clients of tech companies also often agree not to hire tech people away from technology consulting firms.

  3. Back in the day, I was working for a company called Digital Equpment Corporation. Digital hired ne away from a company called ARA Services and ARA was pissed. The guy I worked for at ARA was cool though. He smoothed things over. Digital even turned around and leased me back to ARA. Then ironically a job opportunity at Apple came up and Digital threatened to take legal action if I went to work for Apple because at the time I was trying to help get their doomed personal computer line off the ground. Digital just didn’t get personal computers, heh.

    These practices are probably much older than silicon valley.

  4. “In our opinion, Palm is headed by vindictive, derivative, scorned little men.”

    Sounds like they’re not the only ones, Lol.

    Once word spreads, it’ll make Jobs look like he’s insecure and running scared from the little guy Palm. And threatening them with legal battles because they hired your workers away? Who is he, Steve Ballmer?

    The past few weeks have been one PR disaster after another for Apple.

  5. It sounds to me like he was asking that they don’t poach each other’s employees, not that they refuse to hire some from Apple who wanted to go to Palm. Is that illegal?

  6. @ndelc:

    You’re exactly right.

    If someone doesn’t want to work for Apple, Jobs doesn’t care. It’s the poaching that’s bad: it makes companies not trust their employees and raises costs for both companies. It’s a war where both lose. (Look at the employee poaching battles between Microsoft and Borland from years ago.)

    I believe there also should be concerns about proprietary technology and information being shared. Like Rubinstein knowing how to make a device appear as an iPod inside iTunes. If he used insider information to do that, that should be illegal on Palm’s part.

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